Bulls And Bears

Positive Wall Street showing lifts Asia shares

STI closes up 0.8% as strong US corporate earnings spark investors' optimism

Investors rediscovered their risk appetites yesterday thanks to Wall Street's positive response to some strong performances by American corporates.

"Asia was mostly higher as investors took solace from a raft of earnings that provided some optimism against... concern that global economic growth lacks momentum," AxiTrader Asia-Pacific market strategist Stephen Innes noted.

The buoyant mood lifted the Straits Times Index (STI) by 0.4 per cent at the opening and left it up 0.8 per cent or 24.59 points at 3,168.87 by the close.

Elsewhere, Australia, Hong Kong, Japan, Malaysia and South Korea all registered gains but China was flat.

While the trade conflict was off the front pages, other developments were in play. The risk of a no-deal Brexit is diminishing while Turkey has agreed to a permanent ceasefire in northern Syria, resulting in the United States lifting sanctions.

Trading volumes here hit 1.31 billion shares worth $1.10 billion, with gainers trumping losers 244 to 136.

A sizeable amount of trading volume could be due to increased activity among small-cap upstream oil and gas players. Rex International added 5.3 per cent to 10 cents on 139.5 million shares traded, about 10 per cent of yesterday's total volume.

Other actives included Alpha Energy, up 3.9 per cent to 2.7 cents, and GSS Energy, ahead by 11.3 per cent to 7.9 cents.

Such stocks, often viewed as proxies to higher oil prices, rallied after US government data showed a surprise drawdown in crude supplies.

Oanda Asia-Pacific senior market analyst Jeffrey Halley noted that profit-taking was seen for oil during the Asian session after a 2.5 per cent gain in price.

Among tech stocks, UMS Holdings added 5 per cent to 74 cents after DBS Equity Research upgraded the semiconductor play to "buy" and increased its target price to 87 cents.

The upgrade is premised on forecasts by SEMI - a global industry association - that the semiconductor equipment market is set to jump 11.6 per cent next year.

"At the company level, our channel checks show that UMS is beginning to see a pickup in semiconductor sales, which should be reflected in its coming quarters' results," said DBS Bank analyst Ling Lee Keng.

Keppel Corp continued to see considerable activity after Temasek's partial offer to raise its stake in the conglomerate to 51 per cent. It advanced 2.2 per cent to close at $6.88.

The banking trio outperformed the STI. OCBC Bank added 0.9 per cent to $10.74, United Overseas Bank put on 1 per cent to $26.02, while DBS rose 1.2 per cent to $25.08.

A version of this article appeared in the print edition of The Straits Times on October 25, 2019, with the headline 'Positive Wall Street showing lifts Asia shares'. Print Edition | Subscribe